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The average interest rate for a 30-year fixed mortgage is 7.00% today, down 0.02% from a week ago. The average interest rate for a 15-year fixed mortgage is 6.46%, up 0.03% from last week. See the chart below for mortgage rate trends.
The Federal Reserve has refrained from cutting interest rates due to slow improvement in inflation. Experts expect mortgage rates to gradually decline in the coming months, but housing market forecasts are always subject to change depending on economic data, geopolitical events, and more.
Current average mortgage interest rates
Refinancing your mortgage
Compare today's average mortgage rates on July 2, 2024 to a week ago, using interest rate data collected by Bankrate as reported by lenders across the United States.
Falling mortgage rates make homebuying more affordable. Experts recommend shopping around among different mortgage lenders to find the best deal. Enter your information below to get a custom quote from CNET's partner lenders.
About these rates: Like CNET, Bankrate is owned by Red Ventures. This tool features partner rates from lenders that you can use to compare multiple mortgage rates.
How do I choose my mortgage term?
Each mortgage has a loan term, or payment schedule. The most common mortgage terms are 15 and 30 years, but 10-, 20-, and 40-year mortgages are also available. With a fixed-rate mortgage, your interest rate is set and remains stable for the life of the loan. With an adjustable-rate mortgage, your interest rate is fixed for only a set period of time (usually 5, 7, or 10 years), after which your rate adjusts annually based on the market. A fixed-rate mortgage is better if you plan to stay in your home long-term, but an adjustable-rate mortgage may allow you to pay a lower interest rate up front.
30-Year Fixed Rate Mortgage
Currently, the average interest rate for a 30-year fixed mortgage is 7.00%. The 30-year fixed mortgage is the most common loan term. It often has a higher interest rate than a 15-year mortgage, but the monthly payment is lower.
15-Year Fixed Rate Mortgage
Currently, the average interest rate on a 15-year fixed mortgage is 6.46%. While your monthly payment will be larger than a 30-year fixed mortgage, interest rates on a 15-year loan are typically lower, meaning you'll pay less in interest over the long term and pay off your mortgage faster.
5/1 Adjustable Rate Mortgage
The average interest rate for a 5/1 adjustable-rate mortgage is currently 6.66%. Typically, you'll get a low introductory rate with a 5/1 ARM for the first five years of your mortgage. After that period, however, you may end up paying more depending on how your interest rate adjusts each year. If you plan to sell or refinance your home within five years, an ARM could be a good option.
Why are mortgage rates so high right now?
When the pandemic began, mortgage rates were near record lows at around 3%. But that changed when inflation soared and the Federal Reserve began a series of aggressive rate hikes starting in March 2022 due to a slowing economy, indirectly pushing up mortgage rates.
More than two years later, mortgage rates are still hovering around 7%. Over the past few months, mortgage rates have fluctuated depending on economic data and investors' expectations of when the Fed will start cutting interest rates.
Today's homebuyers have less room in their budget to cover the costs of purchasing a home due to rising mortgage rates and soaring home prices. A lack of housing inventory and slow wage growth are also contributing to a homebuying crunch, suppressing demand for mortgages.
Will mortgage rates fall this year?
Many experts expect mortgage rates to fall below 7% in the coming months, but a continued downward trend will depend on several factors, including upcoming inflation and labor data.
The Federal Reserve hasn't raised interest rates in nearly a year, but an actual rate cut doesn't seem imminent. Some experts have said the first rate cut could come as early as July, but it's more likely that the Fed will not cut rates until September or November.
“If the Fed takes any action later this year, that could be enough of a signal to the mortgage market that mortgage rates will start to fall,” said Thelma Hepp, chief economist at CoreLogic. “If that happens, we could see mortgage rates end the year at around 6.5%.”
One thing is certain: mortgage rates aren't going to fall overnight for homebuyers, and we're unlikely to see a return to the 2-3% mortgage rates of a few years ago.
Here's a look at what some major housing authorities expect average mortgage rates to be.
Calculate your monthly mortgage payment
The decision to take out a mortgage always depends on your financial situation and long-term goals. The most important thing is to create a budget and work within your means. CNET's mortgage calculator below can help homebuyers prepare for their monthly mortgage payment.
Where can you find the best mortgage rates?
Mortgage rates and home prices are high, but the housing market won't remain unaffordable forever. Saving for a down payment and improving your credit score can help you secure a competitive mortgage rate when the time is right.
Save for a larger down payment: A 20% down payment isn't required, but a larger down payment means you'll borrow less on your mortgage and save money on interest. Improve your credit score: A credit score of 620 will get you a conventional mortgage, but a score of 740 or higher will get you a lower interest rate. Pay off your debt: Experts recommend a debt-to-income ratio of 36% or less to get the best interest rate. If you don't have other debts, you'll be able to better manage your monthly payments. Research loans and assistance: Government-backed loans have more flexible borrowing requirements than conventional loans. Some government-backed or private programs may even offer assistance with down payments and closing costs. Compare lenders: Researching and comparing multiple loan offers from different lenders can help you secure the lowest mortgage rate that suits your situation.
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